Krugman: Waaaaay Too Early To Declare End Of Depression

Paul
Krugman throws cold water on the "green shoots and glimmers"
everyone's all excited about. He makes four key points:

Things are still getting worse. "The most you
can say is that there are scattered signs that things are
getting worse more slowly — that the economy isn’t plunging
quite as fast as it was. And I do mean scattered."

Some of the good news isn’t
persuasive. Goldman's "excluding December"
quarter. Wells Fargo's best quarter ever.

There may be other shoes yet to
drop. "Even in the Great Depression, things
didn’t head straight down. There was, in particular, a pause in
the plunge about a year and a half in — roughly where we are
now." This is the critical one. House prices are
still plunging. With the possible exception of China, the
rest of the world economy is headed into the tank.

Even when it’s over, it won’t be
over. Unemployment likely to keep rising right
through 2010. “'V-shaped' recoveries, in which employment comes
roaring back, take place only when there’s a lot of pent-up
demand." And that's not our problem. We've got the
reverse: Too much pent-up debt. It will take years to
work of the bad debts.